Taiwan suffers chip catastrophe

Fifteen billion dollar plan on ice

UMC has said it is going to put a stop to a massive investment it was going to make because of the oversupply problem in the chip industry. The foundry was going to spend nearly $15 billion to build state of the art fabrication plants but has pulled the plug on the project. Earlier this year, The Register reported that Taiwan was suffering more than most from the problem with semiconductors. See Taiwan suffers from memory glut. At the Computex Trade Show in June, executives from different top Taiwanese companies stepped up to different platforms to say things were not working out as planned. Semiconductors was the major complaint of most, whether LCDs, IC support chips, and DRAMs. Earlier this year we reported exclusively on that oversupply situation. UMC’s decision will have been modified by the state of affairs on the island, which is not only afflicted by the general Asian malaise, but also by uncertainty as to its future, given US president Bill Clinton’s assertion that Taiwan should be part of Red China. Two weeks ago we reported that a Chinese consortium was in talks to acquire Siemens’ doomed state of the art fab in the North East of England. That now seems increasingly unlikely. ®